Author Archives: Fozeia Rana-Fahy

In the Matter of the C Trust [2016] SC [Bda] 53 Civ was the first Bermuda case to extend the perpetuity period under the new Section 4 of the Bermuda Perpetuities and Accumulations Act 2009 (“the 2009 Act”). The amendment to Section 4 took effect in December 2015. Although prior to the amendment, the 2009 Act had already abolished the rule against perpetuities with respect to instruments taking effect on or after 1 August 2009, the rule continued to apply to trusts established under Bermuda law prior to 1 August 2009 as well as to trusts originally established in other jurisdictions (with an applicable perpetuity period or similar limitation) but now governed by Bermuda law.

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Bermuda Trusts Update (2016)

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In an anonymised ruling of December 2014, In the Matter of the Estate of PQR, Deceased [2014] Bda No. 205, Chief Justice Kawaley analysed the legality of a forfeiture clause within a Bermuda will. The point of construction was one that had not been determined as a matter of Bermuda law and turned on the divergence between commonwealth case law (more hostile to the validity of forfeiture clauses) and English case law (less hostile to the notion of seeking to give reasonable effect to forfeiture clauses).

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2014 also saw the introduction of the Trustee (Special Provisions) Amendment Act 2014 (the “Act”) which provides statutory clarity and certainty with respect to the powers settlors can reserve or grant over a trust without calling into question the validity of the trust structure. The powers enshrined in this legislation are expected to attract a wide class of settlors from both North America and Europe and further enhance Bermuda’s reputation as the offshore jurisdiction of choice for trusts. The Act amends the Trusts (Special Provision) Act 1989 by inserting a new section 2A which sets out an express list of certain interests and powers that can be retained by a settlor or granted to a third party, including the following:

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In its 2014 decision, the Court of Appeal considered Chief Justice Kawaley’s first instance 2013 decision to order the production of trust documents to a beneficiary notwithstanding that the trust deed contained an information control mechanism designed to prevent disclosure of financial information unless the Protector (who was also the principal beneficiary) consented.

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